Chancery douses incendiary knocking campaign

A dramatic road show and video set light to competing boards and panels used in building construction and compared their fire resistance. The brand that apparently came off worst sued for trade mark infringement and malicious falsehood. Clare Nicholson reports on the High Court’s verdict.

This case concerns comparative advertising for insulation products made from plastic foams and mineral wool used in the construction industry. Products made with plastic foams can be relatively thin because plastic foams have good insulation properties but are, however, combustible. Mineral wool, on the other hand, is non-combustible, but has relatively poor insulation values which means that the products are relatively thick.

The claimants ("Kingspan") produce insulation boards and panels made with plastic foams, whereas the defendant ("Rockwool") produces these products using mineral wool.

Rockwool ran a promotional campaign consisting of road shows and videos. Rockwool used the campaign to demonstrate the non-combustible safety of their mineral wool products against other products that were combustible but labelled "fire safe" in accordance with relevant regulations.

Kingspan claimed that the campaign made a series of misrepresentations that its plastic foam products are a fire hazard and unsafe for their purposes. Kingspan issued proceedings for trade mark infringement, malicious falsehood and also sought certain declarations of fact to the effect that Rockwool's campaign contained misrepresentations concerning Kingspan's products.

Rockwool argued that its tests were fair and objective. It subjected both its own products and those of Kingspan to the tests to show that products made with non-combustible materials are substantially more resistant to direct attack by flames than those made with combustible materials. Rockwool argued that it is entitled to show the results of those tests to the trade and to demonstrate the fire reaction properties of the products, particularly since Kingspan had marketed its products as "fire safe".

On the basis that its tests were fair and objective, Rockwool argued that, although the road shows and its first two videos referred to the Kingspan trade marks, there was no trade mark infringement as the tests fell within the scope of the Misleading and Comparative Advertising Directive 2006/114/EC (the "MCA Directive"). Rockwool also argued that the road shows and videos did not contain the alleged misrepresentations and it had not acted maliciously. Rockwool also sought certain declarations of fact regarding its campaign.

Rockwool: "A travesty to call plastic foams used for building fire safe"

Rockwool's tests were based on the premise that Kingspan marked all its plastic foam products as "fire safe" and that it was a "travesty", as was said at one of the road shows, to claim that plastic foams used in a building context are "fire safe", therefore suggesting that if used in a building context they are not "fire safe". However, in fact, Kingspan had only marked one of its products in question as "fire safe".

In addition, Rockwool did not install Kingspan's products in accordance with the manufacturer's instructions nor did Rockwool test them in a way they would be used in real life (for example, one product was tested in an internal model room when it was designed and intended for external use). Therefore Rockwool's tests were not designed to, and could not, evaluate the performance of the Kingspan products in a situation of real fire and could not produce results that represented the integrity of the Kingspan products in their designed usage.

Alleged misrepresentations

In relation to the alleged misrepresentations, it was held that Rockwool had falsely represented that Kingspan's products:

are not safe when properly installed and used for their intended purpose;

have dramatic implications regarding escape times and structural damage.

Kitchin J held that the declarations sought by the parties "are, as both sides agreed, declarations of fact, and neither has any objection to this court making such declarations as a matter of principle. Indeed it is accepted they will resolve an issue of real substance between the parties". Kitchin J granted declarations of fact in relation to Rockwool's misrepresentations about Kingspan's products.

Trade mark infringement

The MCA Directive permits unauthorised use of another's trade mark where products are compared objectively. Rockwool argued that Kingspan's allegations of trade mark infringement fail because its activities constitute legitimate comparative advertisements. Therefore its activities cannot affect, or be liable to affect, the functions of a trade mark for which protection can be claimed.

Kitchin J considered the MCA Directive and Rockwool's road shows and videos. He held that "when considered through the eyes of persons who specify or influence the specification of the building materials to be used in a project they are each misleading and fail objectively to compare one or more material, relevant, verifiable and representative features of Rockwool's and Kingspan's products". Therefore he found trade mark infringement because Rockwool had, without due cause, taken unfair advantage of, and caused detriment to, the repute of the Kingspan's trade marks and had discredited and denigrated Kingspan's products.

Malicious falsehood

The malicious falsehood claim, which was brought in relation to Rockwool's videos, failed. The essentials of this tort are that:

the defendant has published words about the claimant which are false;

they were published maliciously; and

special damage has followed as the direct and natural result of their publication.

Whilst Kitchin J was satisfied that the videos contained false representations, which would be understood to refer to Kingspan, its products and business and were calculated to cause Kingspan pecuniary damage, he did not find that Rockwool had acted out of malice.

Malice will be inferred if it is proved that the words were calculated to cause damage and that the defendant knew when he published the words that they were false or was reckless as to whether they were false or not. On the evidence, Rockwool's activities were not sufficient to establish malice; Kitchin J found Rockwool had "acted throughout in good faith" and Kingspan's claim for malicious falsehood was dismissed.

Why this matters:

Kitchin J observed that comparisons of the properties of competitors' products are to be encouraged and it is not open to a party to object to such comparisons simply because they are unfavourable to its products. [The Court of Justice of the European Union has held that the purpose of the conditions in the MCA Directive is to "achieve a balance between the different interests that may be affected by comparative advertising. The aim is to stimulate competition between suppliers of goods and services to the consumer's advantage, by allowing competitors to highlight objectively the merits of comparable products while, at the same time, prohibiting practices which may distort competition, be detrimental to competitors and have an adverse effect on consumer choice".] A lawful comparative advertisement will not affect the functions of a registered trade mark and will not amount to trade mark infringement.

Therefore, this case highlights the importance for brand owners to ensure that they compare products on a fair and objective basis and in accordance with the eight cumulative conditions for lawful comparative advertising listed in Article 4 of the MCA Directive.

The precise form of order, including the declarations, has yet to be decided. However, this case also highlights the UK court's willingness to order declarations of fact as a remedy. Therefore brand owners should consider seeking these in relation to any unlawful comparative advertisements regarding their products or services as the order with the declarations can then be published to rebut a competitor's unlawful advertisement. Conversely, brand owners should also be aware that their competitors may seek, obtain and use such declarations in response to any advertisements that unlawfully compare the brand owners' and competitors' products or services.